§ 1715z-3. — Special Risk Insurance Fund.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 12USC1715z-3]
TITLE 12--BANKS AND BANKING
CHAPTER 13--NATIONAL HOUSING
SUBCHAPTER II--MORTGAGE INSURANCE
Sec. 1715z-3. Special Risk Insurance Fund
(a) Entitlement to benefits; computation and payment of benefits to
mortgagee
(1) Any mortgagee under a mortgage insured under section 1715z(i),
(j)(4), 1715z-2, or 1715z-8 of this title shall be entitled to receive
the benefits of the insurance as provided in section 1710(a) of this
title with respect to mortgages insured under section 1709 of this
title. The provisions of subsections (b), (c), (d), (g), (j), and (k)
\1\ of section 1710 of this title shall be applicable to mortgages
insured under section 1715z(i), (j)(4), 1715z-2, or 1715z-8 of this
title, except that all references therein to the ``Mutual Mortgage
Insurance Fund'' shall be construed to refer to the ``Special Risk
Insurance Fund'', and all references therein to section 1709 of this
title shall be construed to refer to section 1715z(i), (j)(4), 1715z-2,
or 1715z-8 of this title, as may be appropriate.
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\1\ See References in Text note below.
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(2) Any mortgagee under a mortgage insured under section 1715z(j)(1)
or 1715z-1 of this title shall be entitled to receive the benefits of
insurance as provided in section 1713(g) of this title with respect to
mortgages insured under section 1713 of this title. The provisions of
subsections (d), (e), (h), (i), (j), (k), (l), and (n) of section 1713
of this title shall be applicable to mortgages insured under section
1715z(j)(1) or 1715z-1 of this title, except that all references therein
to the ``General Insurance Fund'' shall be construed to refer to the
``Special Risk Insurance Fund'' and the premium charge provided in
section 1713(d) of this title shall be payable only in cash or
debentures of the Special Risk Insurance Fund.
(3) In lieu of the amount of insurance benefits computed pursuant to
paragraph (1) or (2) of this subsection the Secretary, in his discretion
and in accordance with such regulations as he may prescribe, may (with
respect to any mortgage loan acquired by him) compute and pay insurance
benefits to the mortgagee in a total amount equal to the unpaid
principal balance of the loan plus any accrued interest and any advances
approved by the Secretary and made previously by the mortgagee under the
provisions of the mortgage.
(b) Creation of fund; authorization for advancements; repayment;
crediting of charges and fees; payments from fund; authorization
of appropriations for losses; deposits to fund; open-market
purchases of debentures which are obligations of fund
There is hereby created a Special Risk Insurance Fund (hereinafter
referred to as the ``fund'') which shall be used by the Secretary as a
revolving fund for carrying out the mortgage insurance obligations of
sections 1715n(e), 1715x(a)(2), 1715z, 1715z-1, 1715z-2, and 1715z-8 of
this title, and the Secretary is hereby authorized to advance to the
fund, at such times and in such amounts as he may determine to be
necessary, a total sum of $20,000,000 from the General Insurance Fund
established pursuant to the provisions of section 1735c of this title.
Such advance shall be repayable at such times and at such rates of
interest as the Secretary deems appropriate. Premium charges, adjusted
premium charges, inspection and other fees, service charges, and any
other income received by the Secretary under sections 1715n(e),
1715x(a)(2), 1715z, 1715z-1, 1715z-2, and 1715z-8 of this title,
together with all earnings on the assets of the fund, shall be credited
to the fund. All payments made pursuant to claims of mortgagees with
respect to mortgages insured under sections 1715x(a)(2), 1715z, 1715z-1,
1715z-2, and 1715z-8 of this title or pursuant to section 1715n(e) of
this title, cash adjustments, the principal of and interest paid on
debentures which are the obligation of the fund, expenses incurred in
connection with or as a consequence of the acquisition and disposal of
property acquired under such sections, and all administrative expenses
in connection with the mortgage insurance operations under such sections
shall be paid out of the fund. Moneys in the fund not needed for current
operations of the fund shall be deposited with the Treasurer of the
United States to the credit of the fund or invested in bonds or other
obligations of, or in bonds or other obligations guaranteed by, the
United States or any agency of the United States: Provided, That such
moneys shall to the maximum extent feasible be invested in such bonds or
other obligations the proceeds of which will be used to directly support
the residential mortgage market. The Secretary, with the approval of the
Secretary of the Treasury, may purchase in the open market debentures
which are the obligation of the fund. Such purchases shall be made at a
price which will provide an investment yield of not less than the yield
obtained from other investments authorized by this section. Debentures
so purchased shall be canceled and not reissued.
(c) Mortgage insurance for military impacted areas; criteria; obligation
of Special Risk Insurance Fund; establishment of premiums and
other charges
(1) Notwithstanding the provisions of this chapter or any other Act,
and without regard to limitations upon eligibility contained in any
section of this subchapter, the Secretary is authorized, upon
application by the mortgagee, to insure under any section of this
subchapter a mortgage executed in connection with the construction,
repair, rehabilitation, or purchase of property located near any
installation of the Armed Forces of the United States in federally
impacted areas in which the conditions are such that one or more of the
eligibility requirements applicable to the section under which insurance
is sought could not be met, if (A) the Secretary finds that the benefits
to be derived from such use outweigh the risk of probable cost to the
Government, and (B) the Secretary of Defense certifies that there is no
intention insofar as can reasonably be foreseen to curtail substantially
the personnel assigned or to be assigned to such installation. The
insurance of a mortgage pursuant to this subsection shall be the
obligation of the Special Risk Insurance Fund.
(2) The Secretary is authorized (A) to establish such premiums and
other charges as may be necessary to assure that the mortgage insurance
program pursuant to this subsection is made available on a basis which,
in the Secretary's judgment, is designed to be actuarially sound and
likely to maintain the fiscal integrity of such program, and (B) to
prescribe such terms and conditions relating to insurance pursuant to
this subsection as may be found by the Secretary to be necessary and
appropriate, and which are to the maximum extent possible, consistent
with provisions otherwise applicable to mortgage insurance and payment
of insurance benefits.
(3) The Secretary shall undertake an annual assessment of the risks
associated with each of the insurance programs comprising the Special
Risk Insurance Fund, and shall present findings from such review to the
Congress in the FHA Annual Management Report.
(June 27, 1934, ch. 847, title II, Sec. 238, as added Pub. L. 90-448,
title I, Sec. 104(a), Aug. 1, 1968, 82 Stat. 486; amended Pub. L. 91-
152, title IV, Sec. 415, Dec. 24, 1969, 83 Stat. 401; Pub. L. 91-351,
title V, Sec. 503, July 24, 1970, 84 Stat. 461; Pub. L. 91-609, title I,
Sec. 117(d), Dec. 31, 1970, 84 Stat. 1775; Pub. L. 93-383, title III,
Sec. 318, Aug. 22, 1974, 88 Stat. 685; Pub. L. 95-128, title III,
Sec. 309, Oct. 12, 1977, 91 Stat. 1135; Pub. L. 103-233, title I,
Secs. 103(g)(1), 105(a), Apr. 11, 1994, 108 Stat. 362, 363.)
References in Text
Subsection (k) of section 1710 of this title, referred to in subsec.
(a)(1), was repealed by Pub. L. 105-276, title VI, Sec. 601(c), Oct. 21,
1998, 112 Stat. 2673.
Amendments
1994--Subsec. (b). Pub. L. 103-233, Sec. 105(a), struck out after
fourth sentence ``There is authorized to be appropriated such sums as
may be needed from time to time to cover losses sustained by the fund in
carrying out the mortgage insurance obligations of sections 1715n(e),
1715x(a)(2), 1715z, 1715z-1, 1715z-2, and 1715z-8 of this title.''
Subsec. (c)(3). Pub. L. 103-233, Sec. 103(g)(1), added par. (3).
1977--Subsec. (c). Pub. L. 95-128 substituted provisions of pars.
(1) and (2) respecting mortgage insurance for military impacted areas,
criteria therefore, and establishment of premiums and other charges for
prior subsec. (c), which had authorized use of the Special Risk
Insurance Fund to carry out mortgage insurance obligations of sections
1709 and 1713 of this title to provide housing for military personnel,
Federal civilian employees, and Federal contractor employees assigned to
duty or employed at or in connection with any installation of the Armed
Forces in federally impacted areas where in the judgment of the
Secretary (1) the residual housing requirements for persons not
associated with such installations were insufficient to sustain the
housing market in the event of substantial curtailment of employment of
personnel assigned to such installations, and (2) the benefits to be
derived from such use outweighed the risk of possible cost to the
Government.
1974--Subsec. (c). Pub. L. 93-383 added subsec. (c).
1970--Subsec. (a)(1). Pub. L. 91-351, Sec. 503(1), inserted
references to section 1715z-8 of this title wherever appearing.
Subsec. (b). Pub. L. 91-609 provided for guarantee as to principal
and interest by any agency of the United States and for investment of
moneys in bonds or other obligations the proceeds of which will be used
to directly support the residential mortgage market.
Pub. L. 91-351, Sec. 503(2), inserted references to section 1715z-8
of this title wherever appearing.
1969--Subsec. (b). Pub. L. 91-152 increased from $5,000,000 to a
total sum of $20,000,000, at such times and in such amounts as he may
determine to be necessary, the amount authorized to be advanced by the
Secretary to the Fund.
Section Referred to in Other Sections
This section is referred to in sections 1709, 1715v, 1735f-20 of
this title.
